Breaking Down Trade Barriers for Ag Small Businesses

7/19/2014 7:00 AM
By Janice F. Booth Maryland Correspondent

ANNAPOLIS, Md. — Exporting food and ag products to international markets was the focus of two free workshops July 9-10 in Annapolis. The workshops, sponsored by the Maryland Department of Agriculture and the Southern United States Trade Association, or SUSTA, are part of a campaign to encourage American farmers and small businesses marketing value-added products using U.S. agricultural materials to engage in international trade deals.

Attendees, including agricultural small business owners, heard representatives from SUSTA and other guest speakers discuss basic export-import practices between the U.S. and Canada. Via Skype, Simon Pilsworth of SJP International and Heidi Kim of Argyle Inc., discussed some fundamental facts about the Canadian export market. Consultant Andrew Kreinik discussed developing an international marketing plan, and John Strayhorn of Global Insurance Services reviewed “getting paid,” an important component of successful international trade.

Kristin Core of SUSTA reviewed the resources and opportunities offered to small businesses through the efforts of SUSTA. A nonprofit organization, SUSTA receives funding from the USDA and assistance through the USDA’s Foreign Agricultural Service.

In addition to basic training workshops in the 16 member states — from Florida to Maryland — SUSTA provides small, private agricultural businesses with strategies and funding for brand promotion, offering up to 50 percent reimbursement for expenses associated with international marketing such as trade show participation, advertising and product label compliance. The Market Access Program brand promotion has some rather arduous eligibility requirements, but the effort could be worthwhile for any farm business wanting to expand into foreign markets.

Another successful market access program offered by SUSTA is the International Marketing Program. This initiative helps subsidize small agricultural businesses to participate in international trade shows, assisting with creation and funding of advertising, exhibition fees, and many other costs.

Heidi Kim, an in-country Canada consultant for SUSTA, pointed to some alluring statistics on Canadian trade markets. Kim said that in 2013, U.S. exports to Canada exceeded $20 billion, which represents about 15 percent of the total U.S. food and agricultural exports, and 60 percent of Canada’s total agricultural imports. Kim reminded the audience that unlike other international trade partners, Canadians, for the most part, speak English and their dollar is strong. With a strong economy, Kim said Canadians have disposable income for buying quality products. It’s a potentially big market for Maryland watermen, with 35 percent of Canada’s imported fishery products from the U.S., making Canada the second largest market for U.S. fish and bay harvests.

But Kim said there are some potential drawbacks to marketing in Canada. They include tariff rate quotas, high listing and placement fees, and stringent food labeling and bilingual packaging requirements. Marketing and distributing costs may also be higher due to Canada’s vastness and disbursement of its population. And while Canadian retailers are looking for new, innovative products, the number of retailers is relatively small.

Todd Courtney, “The Dirt Man,” began selling his unique seasoning six years ago. He has expanded his client base with a few buyers in England, the Netherlands and Canada, but the deals and shipping are complicated and costly. His associate, Linda Morales, said,”It would be great if we could get help setting up easier, more reliable shipping and customs procedures.”

Courtney, the owner of Todd’s DIRT Seasonings Co., points out that he has been doing fancy-food trade shows for years.

“But I don’t know how to get my product into trade shows outside the U.S. Now I may be able to get some help figuring out a way,” he said.